I am a believer that the auction method, when used property, is a very effective tool in selling property.
We can debate day in and day out the benefits of an auction for the seller. They include shorter times and non-contingent contracts. That is not the point of this post, however.
The point of this post is that auctions can make the AGENTS more money faster too.
While the percentages differ a little around the US, most auctioneers will tell you that BUYERS AGENTS typically do not show up at auctions. When they do, their clients typically do not buy the property.
In most real estate transactions that involve an auctioneer, there is compensation available for buyers agents.
Do you know what happens if there is no buyers agent? Usually, that money is split between the listing agent and the auctioneer.
It can also be given back to the seller or any number of things and is a negotiable item.
Considering that NO BUYERS AGENTS is involved in over 80% of my transactions, that leaves a lot of money on the table.
Quite often the contract can say that in the event there is a buyers agent involved, the listing agent/auctioneer agrees to provide a co-op of XXXX. By default and unless modified through negotiation, that means that the compensation is retained by the listing agent/auctioneer if there is not buyers agent.
So remember, if you are negotiating a deal to assist your client through an auction, there is a large chance that the buyer agents co-op allowance will not be collected by anyone. how you use that information is up to you.
Do you have questions about distressed assets, receivership or bankruptcy sales, auctions? Email me at rfk@gryphonusa.com and I'll try to answer it in an upcoming post.
Richard F. Kruse is the President of Columbus, Ohio based Gryphon USA, Ltd. (www.gryphonusa.com). The Gryphon Organization includes Gryphon Asset Management providing receivership and consulting services in the distressed marketplace, United Country Gryphon Realty & Auction Group (www.ucohiorealty.com & www.ucohioauctions.com) providing real estate brokerage and auction services throughout Ohio and OnlineAuctionUSA.com (www.onlineauctionusa.com) providing commercial asset liquidations from the Midwest to East Coast.
United Country Gryphon Realty & Auction Career Opportunities Available. Call 614-885-0020 x 17
I have been in both types of positions. It is all about creating awareness for the property. The best auction is one for the easy to sell property because you are assured that you took every last penny off the table.
The hardest properties to sell at top dollar are ones where the most likely buyer will need to use seller incentives or FHA loans to purchase. Auction contracts are non-contingent and usually require a cash deposit from the buyer. My minimum is $2500 and I have recently had upwards $40,000.